Real Estate Values in 2007 and Beyond
The year is about to become 2007. China and India have marched onto the world stage. Europe is going sideways to slightly improving. Terrorism has become the newest religion. And third-world countries are going nuclear.
Since the Pilgrims landed on November 21, 1620, the United States has seen the Agricultural Revolution, The Industrial Revolution I, The Industrial Revolution II, The Manufacturing Revolution, and now the Technological Revolution.
Now that we are at the beginning of the Technological Revolution, where does real estate fit in? How are the different types of real estate affected? What will happen to real estate values during (1) the near-term (the next 12 months), (2) the intermediate-term (the next 13 to 36 months), and (3) the long-term (the next 37 months and beyond)? Standing at the threshold of the year 2007 causes NetGain to reminisce and contemplate the answers to those questions. Following are the results of those efforts.
The Agricultural, Industrial I, Industrial II, Manufacturing and Technological Revolutions have brought about significant changes in the usages and occupants of American real estate. We’ve seen housing evolve from homes to boarding houses to apartment houses to garden style apartment communities to high rise apartment houses to condominiums and cooperatives. We’ve seen family-owned general stores become million square foot enclosed malls with over 150 stores. We’ve seen grain silos become warehouses with loading docks. We’ve seen small manufacturing facilities becomes as large as several football fields. All of this job-motivated real estate change required support real estate, and so medical, educational, entertainment, and cultural facilities were developed.
History books tell us that the famed Industrial Revolution of the 1700s and early 1800s resulted in the most significant social and economic changes that our country has seen. That is no longer true. Today’s Technological Revolution is causing the most significant social and economic changes our country and the world have ever seen. When the new history books are written, the Industrial Revolution will be a footnote — an important one, but a footnote nonetheless— when compared to the Technological Revolution of today.
The imprint of this Technological Revolution is international. It affects everyone and everything. Its affect on real estate can be summarized in two words: convenient and efficient. Convenient means working, shopping and entertainment are more portable. People are spending less time at designated work places. People are spending less time (current 2%+ decrease is growing) at shopping facilities. People are finding their home becoming a source for more entertainment. Highlights of these changes in the core real estate types are as follows:
Single-Family, Multi-Family Residential
- High speed wireless access to computer(s) devices and telephones
- E-mail communication
- Video conferencing for business and family
- Home education courses and degrees
- Entertainment (movies, music, slides, etc.) through high definition television and surround sound
- Shopping from home
- Work at home office
- Compact storage on disks, hard drives, etc.
